Paine's Vision of Representative Government

Among the thinkers and writers who shaped the independence movement which established the United States as a sovereign nation, the understanding of representative government was central. This established a sharp contrast between them and, for example, Jean-Jacques Rousseau.

The government was to be the instrument and extension of the expressed will of the citizens. The government was not to lead, rule, or reign over the people.

The will of the citizens is not, in this sense, some vague and metaphysical notion like Rousseau’s ‘general will,’ but rather a concrete, empirical, and quantifiable result of balloting - a Lockean understanding of majority rule.

In fact, words like ‘lead’ or ‘rule’ or ‘reign’ are scarce in the writings of the revolutionaries who sought political independence for the thirteen colonies. When those words do occur, it is often in a disapproving description of the British monarchy.

A study of the U.S. Constitution reveals that the words ‘lead’ and ‘reign’ do not occur in it at all. The word ‘rule’ appears only as a noun and not as a verb. The word ‘government’ occurs several times, but the verb ‘govern’ occurs only once: the militia is to be governed in that clause, not the citizens.

The word ‘represent’ (along with ‘representative’ and other forms) occurs forty times.

Instead, the residents of North America sought to establish a republic with freely-elected representatives. The citizens neither wanted nor needed a government to lead them; rather, they arranged for a government to which they would delegate the practical matters of operating a post office or standardizing weights and measures.

For Thomas Paine, the essence of government is representation. He expressed this in a letter to Abbe Sieyes in July 1791. Paine had been, at first, an enthusiastic observer of the French Revolution. He hoped that its outcome would be similar to that of the American Revolution. He would be bitterly disappointed when the French Revolution descended into tyrannical oligarchy, denying the very freedoms it had originally claimed to seek, and executed thousands of innocent civilians.

The Abbe Sieyes was a leader within the French Revolution, and politically wily enough that he was one of a very few such leaders who managed to escape being executed by his fellow revolutionaries. Paine wrote to him:

By republicanism, I do not understand what the name signifies in Holland, and in some parts of Italy. I understand simply a government by representation.

More two hundred years after Paine’s letter, modern political discourse in the United States is full of calls for “leadership,” for someone to “lead the nation,” and for someone to “lead the American people.”

By contrast, two centuries ago, the vision of the founders was for a government to represent, not lead, the citizens. The president was to lead, not the people, but the government as it carried out the will of the electorate.

Approximately a year after this letter to Abbe Sieyes, Thomas Paine again had occasion to express himself regarding forms of government. In May 1792, the British government issued a royal proclamation against seditious writings. The proclamation was triggered largely, almost exclusively, by the popularity of Paine’s book, the Rights of Man.

The book, written while Paine was still a supporter of the French Revolution, was popular in England. It echoed many of the arguments against monarchy, and for representative government, found in Paine’s other writings. But its popularity, and the fact it directed these arguments to events in nearby France instead of faraway America, made the British authorities view it as more dangerous.

The overthrow of the French monarchy raised the fear among English aristocrats that something similar could happen in Britain. The brisk sales of Paine’s book frightened them.

In response to the proclamation, Paine wrote:

I have, as an individual, given my opinion upon what I believe to be not only the best, but the true system of Government, which is the representative system, and I have given reasons for that opinion.

Largely summarizing from Rights of Man, Paine outlines four points against monarchy and for a representative republic. He argues that concentrating power in one person makes war more likely, that monarchs rule in the inexperience of youth and in the senility of dotage, that monarchies have no mechanism for removing incompetent kings, and that both the alleged constitutional structure of, and the legislation issuing from, a monarchy are arbitrary and merely by fiat:

First, Because, in the representative system, no office of very extraordinary power, or extravagant pay, is attached to any individual; and consequently, there is nothing to excite those national contentions and civil wars, with which countries under monarchical governments, are frequently convulsed, and of which the History of England exhibits such numerous instances.
Secondly, Because the representative is a system of Government always in maturity; whereas monarchical government fluctuates through all the stages, from non-age to dotage.
Thirdly, Because the representative system admits of none but men, properly qualified, into the Government, or removes them if they prove to be otherwise. Whereas, in the hereditary system, a nation may be encumbered with a knave or an idiot, for a whole life-time, and not be benefited by a successor.
Fourthly, Because there does not exist a right to establish hereditary government, or in other words, hereditary successors, because hereditary government always means a government yet to come, and the case always is, that those who are to live afterwards have always the same right to establish government for themselves, as the people had who lived before them; and, therefore, all laws attempting to establish hereditary government, are founded on assumption and political fiction.

Having outlined his argument, Paine asserts that the royal proclamation against his book is damaging to the well-being of the people, keeping them in intellectual and political darkness:

If these positions be truths, and I challenge any man to prove the contrary; if they tend to instruct and enlighten mankind, and to free them from error, oppression, and political superstition, which are the objects I have in view, in publishing them, that Jury would commit an act of injustice to their country and to me, if not a act of perjury, that should call them false, wicked, and malicious.

Despite Thomas Paine’s vigorous response to the royal proclamation - or perhaps because of it - his book was seen as criminal by the British government. Paine himself narrowly escaped arrest, and those who printed and published his book faced legal action. Philip Foner writes:

What began as a defense of the French Revolution evolved into an analysis of the basic reasons for discontent in European society and a remedy for the evils of arbitrary government, poverty, illiteracy, unemployment, and war. Paine spoke out effectively in favour of republicanism as against monarchy and went on to outline a plan for popular education, relief of the poor, pensions for aged people, and public works for the unemployed, all to be financed by the levying of a progressive income tax. To the ruling class Paine’s proposals spelled “bloody revolution,” and the government ordered the book banned and the publisher jailed. Paine himself was indicted for treason, and an order went out for his arrest. But he was en route to France, having been elected to a seat in the National Convention, before the order for his arrest could be delivered. Paine was tried in absentia, found guilty of seditious libel, and declared an outlaw, and Rights of Man was ordered permanently suppressed.

Paine’s writing was largely polemic, not systematic. Because he wrote regarding specific situations - now America, now France - he was not attempting to construct a philosophy of government or politics, and did not maintain the internal consistency in which writing which one would expect if he were designing a system of concepts intended for universal application.

British philosopher A.J. Ayer notes some of the resulting internal tensions in Paine’s texts:

Very often, Paine writes as if there were only two systems of government, the hereditary and the representative. In one passage, as we have seen, he mentions three, the governments of priestcraft, conquerors, and reason; apparently placing them in historical order and identifying reason with representation and conquerors with monarchs. Sometimes he remembers that some monarchies have been elective, and in the second part of Rights of Man, he sharply dissents from the opinion of his friend, Abbe Sieyes, that while both forms of monarchy are bad, the elective is worse. Shortly afterwards, continuing to ignore the government of priestcraft, he nevertheless increases the total number of forms of government to four, ‘the democratical, the aristocratical, the monarchical, and what is now called the representative.’ He explains that he does not include republicanism among them, for what is indeed the good reason, that republicanism is not a particular form of government but being ‘wholly characteristical of the purport, manner, or object for which government ought to be instituted, and on which it is to be employed’, that is, the public good, it signifies the rejection of monarchy. He goes on to question the right of Poland, ‘an hereditary aristocracy, with what is called an elective monarchy’, and of Holland, ‘which is chiefly aristocratical, with an hereditary stadtholdership’, to style themselves republics, thereby leaving himself free to conclude that ‘the government of America, which is wholly on the system of representation, is the only real republic in character and in practice, that now exists’. One must bear in mind that both parts of Rights of Man were written before the deposition of Louis XVI.

Paine argued that a representative government is not only morally superior, but historically more durable. Paine’s assertion that a representative form of government outlasts other forms carries his line of thought deeply into the realm of propositions which are empirically verifiable.

Reading sympathetically, we may take Paine’s thesis as a generalization liable to individual exceptions. Otherwise, his thesis might be quickly demolished by a nod to the Roman Empire or one of several Chinese dynasties. Summarizing, A.J. Ayer states:

It could be argued that Paine’s four types of government strictly amounted once again to three, since the representative type is depicted by him as an extension of the democratical. He does not invariably claim that the democratic type was historically prior to all the others, and would indeed have been mistaken if he did. Historical priority must surely be granted to associations, the government of which, while one may not choose to call it monarchic, was at least patriarchal or possibly matriarchal. There is, however, one passage in which he allows himself to assert that departures from democracy, other than its development into representative government, were not only a moral and political but also an historical decline.

The passage which Ayer then cites is one in which Paine notes that direct democracies, in some form, were known in the ancient world. But these democracies, Paine reports, disappear when they grow too large, victims of their own success: they either become monarchies or are swallowed up by monarchies. If these ancient democracies had possessed the insight to institute a representative system, Paine argues, they would have maintained their liberty while growing. In his book, the Rights of Man, Paine writes:

Representation was a thing unknown in the ancient democracies. In those the mass of the people met and enacted laws (grammatically speaking) in the first person. Simple democracy was no other than the common hall of the ancients. It signifies the form, as well as the public principle of the government. As those democracies increased in population, and the territory extended, the simple democratical form became unwieldy and impracticable; and as the system of representation was not known, the consequence was, they either degenerated convulsively into monarchies, or became absorbed into such as then existed. Had the system of representation been then understood, as it now is, there is no reason to believe that those forms of government, now called monarchical or aristocratical, would ever have taken place. It was the want of some method to consolidate the parts of society, after it became too populous, and too extensive for the simple democratical form, and also the lax and solitary condition of shepherds and herdsmen in other parts of the world, that afforded opportunities to those unnatural modes of government to begin.

Despite Paine’s internal inconsistencies on the abstract conceptual level, he is consistent on the concrete matter of arguing for a system of freely elected representatives - a ‘republic’ in his understanding of the word. In this, he was thoroughly in the company of those who led the movement for independence in the second half of the eighteenth century in North America.

A Brief History of Taxation

If one examines the history of tax policy in the United States, such examination must be done from a perspective which takes into account that taxation was a major factor in the independence movement which led to the nation’s founding.

Following the country’s founding in 1776, and the finalization of the Constitution in 1789, political structures, including tax policies, were formed with an eye to keeping the central government weak. Freedom could be protected only by limiting the power of the federal government.

Originally, the constitutional system was so construed that, while Congress could levy taxes, the task of collecting taxes was left to each state individually; this was understood as a mechanism of protecting people from the central government.

The taxes originally authorized by Congress were indirect rather than direct: tariffs on foreign trade and excise taxes on specific products. So structured, these taxes had little discernable impact on the average citizen.

The famous Whiskey Rebellion of 1794 was a group of producers who opposed a federal excise tax. It established two important precedents: first, that the central government would use force to collect taxes; second, that social opposition to taxes would be an important factor in American politics.

In the late 1790s, the federal government experimented with direct taxes - in this case, property taxes on land and buildings - to finance its defense against the belligerent government of the French Revolution. The 1802 election cycle, featuring Jefferson’s ascent to the presidency, was the end of this exploration, and the government returned to indirect taxation.

For the war of 1812, Congress again experimented with taxes, raising excise taxes and customs duties, and borrowing money by issuing bonds. By 1817, these measures were repealed.

Between 1817 and 1861, the federal government effectively imposed no internal revenue. Its income was derived from customs duties and the sale of public land. To be sure, it can be argued that customs duties ultimately have some effect on finances of the private citizen, even if very indirect.

Because the consumption of imports was elective and, for practical reasons, limited to a small segment of the population, the effects of tariffs, while real, were probably too small to be detectable.

The sale of public land as a model for generating revenue to the central government is obviously not infinitely sustainable, but for that time period, it not only relieved the ordinary citizen from being held captive to the tax system, it also placed more raw material and opportunities for production into the economy and thereby generated growth.

So for 44 years, the average citizen enjoyed a level of freedom arguably not seen since. Matt Kibbe writes:

This is a far cry from the way the founding fathers initially envisioned the system of taxation for their new country. For more than a hundred years after its founding, the United States government was funded purely with tariffs, excises, and receipts from the sale of federally owned landed. Direct taxes, such as the now-familiar income tax, were out of the question.

In the 1860s, the costs of the war drove Congress to experiment with income tax, licensing fees, and fees for legal documents. Although these taxes would be repealed at the war’s end, the dangerous precedent had been set. Matt Kibbe continues:

Sadly, this simpler state of affairs was not to last. The Civil War brought an unprecedented level of expenses, and new taxes were an easy way to collect revenue in a hurry. The Revenue Act of 1861 established the Internal Revenue Service and created the first incarnation of what we would recognize as the modern income tax.

Over a period of several years, the Civil War taxes were dismantled. By 1868, the main source of revenue for the federal government was excise taxation on alcohol and tobacco. By 1872, personal income tax had been abolished. From 1868 to 1913, almost 90% of the revenue to the federal government came from excise taxes and customs duties.

In the 1890s, the Supreme Court ruled that income taxes were unconstitutional because they fell disproportionate to the states. Under the leadership of Woodrow Wilson, the progressivist movement was eager for more revenue to enact its social experimentation. Although there was no pressing war or military need, the progressive movement lobbied for a constitutional amendment to ensure that income taxes would be levied.

Reflecting on the experimentation with income tax during the Civil War, Matt Kibbe reflects:

This was originally intended to be a “temporary” measure to finance the war, but history has shown that there are few things more difficult than ending a temporary government program. In 1913, Congress ratified the Sixteenth Amendment to the Constitution, making the individual income tax a permanent feature of the law. Then, the top tax rate was less than 1 percent, and the tax code totaled twenty-seven pages in length.

The sixteenth amendment did, however, more than unleash income taxes on citizens. The precedent created a constitutional relaxation of the limits on government. Previously held in check, the central government soon discovered that it could inflict not only income taxes, but a broad range of taxes and fees and assessments on the citizens.

Since 1913, not only have both the nominal and real amounts of revenue confiscated by the federal government grown rapidly, taking an ever larger percent of the nation’s wealth out of the economy, but the types and numbers of taxes have grown quickly as well.

1776: Was It Really about Taxes?

When hostilities began, in April 1775, in the American Revolution, or as some scholars frame it, in the American War of Independence, an exact notion of the reason for the war was lacking - or, perhaps more accurately, there were competing notions about the exact reason for the war.

A collection of phrases reflects the slightly different motives held by different segments of the population: “freedom of speech” or “no taxation without representation” or “freedom of the press” or “religious freedom” or “live free or die” and many others. Different emphases included political freedom, spiritual freedom, and economic opportunity.

It was important for the leaders of the revolution to harmonize these goals - and to show that there was a common essence which these goals shared. Political freedom, religious freedom, and economic freedom are, finally, variations on freedom.

Economic freedom is the only possible foundation for economic opportunity and prosperity.

In addition to uniting the varying motivations for independence, the American leaders also addressed the significant segment of the population which either opposed, or was uncertain about, independence.

Thomas Paine’s writing influenced many as he explained the revolution and the ideas behind it. His style was energetic, the length of most of his writings short, and his diction accessible to the general reading public. His texts were precisely the sort of language which was comfortable for the average reading citizen. Among his many writings was a series of newspaper articles published under the title The Crisis.

In one installment in this series, written in Philadelphia in October 1780, Paine explores the role of taxation as a motivation for the independence movement. He argues cogently that independence makes financial sense. After presenting long lists of taxes and expenses, and calculating the average of these over the population of the thirteen colonies, he summarizes:

I have placed before the reader, the average tax per head, paid by the people of England; which is forty shillings sterling.

And I have shown the rate on an average per head, which will defray all the expenses of the war to us, and support the several governments without running the country into debt, which is thirteen shillings and fourpence.

In short, Thomas Paine calculates that even with the cost of the war, and including the ongoing cost of running the government after independence is achieved, that the average resident of the colonies will pay many fewer taxes.

If a man were the crassest of materialists, and had no love but money, he would then support the revolution. Paine certainly does not endorse pure greed as the supreme guiding principle in life, but makes the argument as a sort of reductio ad absurdum. He points out the greater benefit of liberty which independence will bring.

One further point remains: without making the greed of the crass materialist into one’s guiding principle in life, one must still note that economic freedom is to be desired because it is a necessary precondition to those more noble-sounding forms of liberty. Without economic freedom, including the lower taxes explained by Paine, the other freedoms are meaningless and impossible.

Without free markets and minimalistic taxes, there is no true freedom of speech, freedom of the press, freedom to assemble, freedom of association, or freedom of religion. Without the material means to instantiate themselves, the intellectual liberties are unintelligible. Paine explains:

The peace establishment then will, on an average, be five shillings sterling per head. Whereas, was England now to stop, and the war cease, her peace establishment would continue the same as it is now, viz. forty shillings per head; therefore was our taxes necessary for carrying on the war, as much per head as hers now is, and the difference to be only whether we should, at the end of the war, pay at the rate of five shillings per head, or forty shillings per head, the case needs no thinking of. But as we can securely defend and keep the country for one third less than what our burden would be if it was conquered, and support the governments afterwards for one eighth of what Britain would levy on us, and could I find a miser whose heart never felt the emotion of a spark of principle, even that man, uninfluenced by every love but the love of money, and capable of no attachment but to his interest, would and must, from the frugality which governs him, contribute to the defence of the country, or he ceases to be a miser and becomes an idiot. But when we take in with it every thing that can ornament mankind; when the line of our interest becomes the line of our happiness; when all that can cheer and animate the heart, when a sense of honor, fame, character, at home and abroad, are interwoven not only with the security but the increase of property, there exists not a man in America, unless he be an hired emissary, who does not see that his good is connected with keeping up a sufficient defence.

Paine takes effort to calculate as a dispassionate disinterested economist. Surely this is a pose: Thomas Paine was a passionate advocate of independence. But his pose is taken to persuade his reader - he argues that even if one were indifferent, or even opposed, to the cause of independence, then sheer financial reckoning should persuade the undecided reader to side with independence.

Suppose Britain was to conquer America, and, as a conqueror, was to lay her under no other conditions than to pay the same proportion towards her annual revenue which the people of England pay: our share, in that case, would be six million pounds sterling yearly. Can it then be a question, whether it is best to raise two millions to defend the country, and govern it ourselves, and only three quarters of a million afterwards, or pay six millions to have it conquered, and let the enemy govern it?

Paine then proceeds to examine the other side of the calculation: if economic forces dictate that a resident of the thirteen colonies would benefit from independence, then similar calculations dictate that England would want to keep the colonies as subjects merely to reap a profit from them. Having saddled the colonies with its economically inefficient army, in the name of protecting them, England wanted to not only cover its costs, but to gain a surplus from the colonies - no matter that the colonies had manifested that they could defend themselves better and at lower cost.

Britain did not go to war with America for the sake of dominion, because she was then in possession; neither was it for the extension of trade and commerce, because she had monopolized the whole, and the country had yielded to it; neither was it to extinguish what she might call rebellion, because before she began no resistance existed. It could then be from no other motive than avarice, or a design of establishing, in the first instance, the same taxes in America as are paid in England (which, as I shall presently show, are above eleven times heavier than the taxes we now pay for the present year, 1780) or, in the second instance, to confiscate the whole property of America, in case of resistance and conquest of the latter, of which she had then no doubt.

Paine clearly advocated independence because he believed it was just; but in this particular installment of The Crisis, he took on the persona of one whose assessment of American independence was purely material. His rhetorical technique, in this episode of his series of articles, was addressed to the those who were perhaps undecided regarding the cause of independence, and designed to persuade them.

Washington, Franklin, and Foreign Wars

Why do we have governments? What is the purpose of government? This question occupied, in a theoretical way, writers like Thomas Hobbes and John Locke.

To be sure, their considerations weren’t purely theoretical: Hobbes lived through both the Thirty Years’ War and the English Civil War, while Locke experienced the Glorious Revolution. But neither of them was in a position to shape the institution of a government ex nihilo.

Hobbes, perceiving human nature as selfish and violent, asserted that the purpose of government was to provide peace and security. Locke, with a bit more optimistic assessment of human nature, viewed the task of a government as protecting the lives, freedoms, and property of its citizens.

Shortly after - Hobbes published his Leviathan in 1651, and Locke’s Treatises appeared in 1689 - events in North America made the question considerably less theoretical and much more practical. In founding a new government, America’s founding fathers relied on their reading of Hobbes, Locke, and other political thinkers.

In addition to determining, in a concrete and specific way, the purpose of government, it was also important to determine what a government should not do. While a government is good or bad to the extent that it does, or does not, serve its proper purpose, it is also good or bad to the extent that it refrains from, or engages in, activities which are outside its proper purpose. Matt Kibbe writes:

We all agree that the first legitimate role of government forces is to protect the lives of individual citizens. But things get more complicated when it comes to defending against “enemies foreign and domestic.”

According to the Lockean views adopted by the founders of the United States, it is within the government’s proper tasks to defend the country militarily when the country is directly threatened by external powers. But what about indirect threats? What about responding to military threats, not on our own territory, but on the territories of a state with which we may have an alliance?

President George Washington worked to formulate a decision procedure by which Americans might decide which conflicts directly involved the country’s interests, and which did not. That question was urgent then, and is urgent over two hundred years later.

One principle he set forth was that the country should avoid excessive attachment to, or antipathy toward, any other nation. The excess, he felt, would arise from passion, not reason, and lead to decisions blinded by emotion.

Thus misled, we might find ourselves surprised by an unexpected attack, drawn into a war involving another’s interests but not our own, or forgoing a beneficial alliance for no good reason. Matt Kibbe frames Washington’s view this way:

In his 1796 Farewell address, George Washington warned Americans not to “entangle our peace and prosperity in the toils” of foreign ambitions, interests, and rivalries. “It is our true policy to steer clear of permanent alliances with any portion of the foreign world.”

A “permanent” alliance would be an irrational one. Nations like Germany, England, Japan, and China have, over the decades, oscillated between being our friends and being our enemies.

The economic cost of war, Washington warned us, is to be carefully considered. Until 1930, the vast majority of nation’s debt was war-related. The Civil War and WWI created both debt and higher taxes. Because debt harms the economy, and the wars created debt, it can be said that those wars harmed economic mobility and economic opportunity, reducing the potential size of the middle class. Matt Kibbe writes:

Our first president was hardly an isolationist, and his foreign policy views were guided, in large part, by common sense and pragmatism. One of his key considerations was the budgetary implications of overly ambitious foreign entanglements. “As a very important source of strength and security, cherish public credit,” Washington counseled. “One method of preserving it is to use it as sparingly as possible, avoiding occasions of expense by cultivating peace.

One may well ask how Washington would have viewed the nation’s involvement in Korea, Vietnam, the Middle East, and other places. Even WWI and the Spanish-American war might be suspect from Washington’s point of view.

In the year 2014 alone, Obama has sent U.S. soldiers into Iraq and the Ukraine. In 2011, he ordered the United States Air Force to bomb Libya. Upon taking office in early 2009, he increased troop levels fivefold in Afghanistan: the U.S. military presence there had numbered approximately 20,000 men until Obama increased it to over 100,000.

To discern whether these actions were justifiable by Washington’s standard would require a nuanced and detailed examination. Matt Kibbe, Distinguished Senior Fellow at the Austrian Economic Center in Vienna, Austria, writes:

You might interpret Washington’s skepticism, in a modern context, as warning against open-ended nation-building quagmires. Can we really establish a constitutional democracy in Iraq? Can we successfully mediate the violent disputes of warring factions in civil wars like the one going on today in Syria? Better yet, should we?

Among the many changes, from George Washington’s time to ours, is that our geographical situation no longer offers us a safe haven. We can be easily attacked in ways not possible two or three centuries ago. This requires that we recalibrate our understanding of threat.

The principle of nonaggression means that we should only declare war on nations demonstrably seeking to do us harm. The men and women who volunteer for our military should not be put in harm’s way by their commander-in-chief without a clear and just purpose, without a plan or without an endgame. This is just common sense.

While our notion of threat may need to be updated, our notion of alliance does not. The litmus test remains this: an alliance should be created or maintained only to the extent, and only as long as, it is in our nation’s interests:

In an era in which our enemies are no longer just confined to nations, the other key question is the balance between security at home and the protection of our civil liberties, particularly our right to privacy and our right to due process. Massive expansions of the government’s surveillance authorities under the Patriot Act and recent amendments to the Foreign Intelligence Surveillance Act have civil libertarians of all ideological stripes worried that the government has crossed essential constitutional lines.

Since Washington’s day, there has always been a tension between war and a citizen’s liberties. In the 1770’s and 1780’s, there were heated debates about conscripting both men and materials from citizens. During WWI, freedom of speech was curtailed in shocking ways. Now, the NSA and other government branches are being used, allegedly in the national interests, to intercept private communications between U.S. citizens.

One distinction needs to be articulated: if some agency of the U.S. government intercepts private communications between individuals who are not U.S. citizens, no civil liberties have been violated, and no U.S. citizen need be concerned. But intercepts of communications between U.S. citizens are matters of grave concern, and in such cases one must ask about warrants and FISA courts.

Returning to the Lockean hypothesis that the task of a government is to protect the lives, properties, and freedoms of its citizens, it is the task of each nation’s government to protect its citizens. If a Spaniard’s cell phone calls are being intercepted by a French intelligence agency, it is the task of the Spanish government, not of the French government, to be concerned about this. If a Swede’s emails are being read by a Polish intelligence agency, the Swedish government, not the Polish government, may have some duty to consider protecting the Swede from “unreasonable search.”

Defending America against the unchecked aggression of our enemies is a first responsibility of the federal government, but respecting the rights of individual citizens and checking the power of unelected employees at the National Security Agency is an equally important responsibility.

A few years before George Washington penned his “farewell address,” Ben Franklin offered some thought on the complexities of economics, freedom, and the role of government.

The situation in which Franklin wrote was this: In 1755, the colony of Pennsylvania was under attack. Franklin was a duly elected member of the legislature in that colony, and the legislature, as the voice of the people, intended to levy a tax upon all the colonists in Pennsylvania. The governor of that colony, however, wanted to exempt from taxation the lands owned by the Penn family.

The revenues from the taxes were urgently needed to continue the conduct of a defensive war.

Franklin noted that it is an “essential liberty” of the voters to levy, through the acts of their representatives, a tax upon the colony. It would be a violation of electorate’s “essential liberty” to impose that tax if one family, by fiat, could exempt itself from that tax.

To complicate matters, the war was raging as the Pennsylvania legislature argued with the governor about its right to levy taxes. The governor, hoping to pressure the legislature, intimated that by delaying the tax until the Penn family’s exemption could be eliminated, the legislature was compromising the safety of colonist in vicinity of the fighting.

The governor argued that the legislature, including Franklin, could “purchase a little temporary safety” by conceding the exemption to the Penn family. Franklin countered that this would be damaging to the rights of the electorate; the voters had the power to levy taxes, and a single family could not simply exempt itself by fiat. Franklin wrote to the governor:

In fine, we have the most sensible Concern for the poor distressed Inhabitants of the Frontiers. We have taken every Step in our Power, consistent with the just Rights of the Freemen of Pennsylvania, for their Relief, and we have Reason to believe, that in the Midst of their Distresses they themselves do not wish us to go farther. Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety. Such as were inclined to defend themselves, but unable to purchase Arms and Ammunition, have, as we are informed, been supplied with both, as far as Arms could be procured, out of Monies given by the last Assembly for the King’s Use; and the large Supply of Money offered by this Bill, might enable the Governor to do every Thing else that should be judged necessary for their farther Security, if he shall think fit to accept it.

While the Penn family, in 1755, did not possess a role in the government that allowed it to make tax regulations, it did have the type of unofficial relationship and influence which could result in the governor taking up its cause. As Matt Kibbe notes, any “unnatural concentration of power” found “outside government” is the result of some relationship between such a non-governmental power and some power within the government.

Thus it is that monopolies, in their truest and most damaging forms, are the products of government. Monopolies arise and endure only when natural market forces have been distorted by government intervention. In a truly free market, monopolies will eventually face some competition. This fact reveals the irony in “anti-monopoly” or “trust-busting” legislation.

We should always be skeptical of too much concentrated power in the hands of government agents. They will naturally abuse it. Outside government, an unnatural concentration of power - such as the extraordinary leverage wielded by mega-investment banks or government employees unions - is always in partnership with government power monopolists.

From the era of Benjamin Franklin to the present, complex questions of international military involvements can be analyzed not only in terms of the nation’s interests in terms of physical security, but also in terms of economic freedom and financial health.

The Coolidge Economy

When Calvin Coolidge suddenly and unexpectedly became President of the United States in 1923, he had a carefully articulated and precisely planned economic policy, although he did not expect that he would have the opportunity to implement it. President Warren Harding’s sudden death placed Coolidge into the position of having to make fiscal decisions, and he was prepared to do because of his systematic understanding of economics.

Coolidge retained Harding’s appointee, Andrew Mellon, as Secretary of Treasury. Despite the abrupt nature of his ascent to the presidency, Coolidge was confident, because he had not only worked out his economic policy over the previous years, but his experience as governor of Massachusetts had given his practical experience in taxation and budgeting.

While we have brief motion pictures and sound recordings of other presidents, Coolidge was perhaps the first president to make frequent and deliberate use of radio broadcasts and film newsreels. The confident expertise which Coolidge exuded was caught on film at an early press conference. Historian Amity Shlaes writes:

The extent to which the new administration would prioritize economy became clear at one of the first press conferences, one that Mellon, finally on U.S. soil, was able to attend. Coolidge, more relaxed than they had ever seen him, led his cabinet to pose outdoors on the White House lawn before a crowd. As the cameras of Fox News and others rolled, Coolidge seated himself in the center chair, and Secretary Hughes placed himself to the president’s right, legs spread out wide. The seat to the new president’s left waited open for Mellon. But Mellon was seconds slow to arrive. In that moment, the camera caught Coolidge’s eagerness. The presidential eyes hunted for the Treasury secretary. The president’s arm motioned. The tap of the hand was a swift but unmistakable, invitation and command.

What was Coolidge’s economic policy? He used the word ‘economy’ in the sense of behaving ‘economically’ - i.e., spending as little as possible. The core of his fiscal policy was reducing government spending. This would lead to reduced deficits, reduced debts, and reduced taxation. Reduced taxation would ease the burden on the middle and working classes, raise wages, and create jobs. These ideas don’t sound new to modern readers, but in the 1920s they were novel.

A convincing speaker, Coolidge argued for his plan, and got support from a wide variety of voters. Even significant members of the opposition party supported the plan. Historian David Greenberg writes:

The 1926 Mellon bill provided for across-the-board income tax cuts, zeroed out the gift tax, halved the estate tax, and slashed surtaxes on the wealthy by 20 percent. Supporting it were several trade associations, banks, local chambers of commerce, and a business lobby formerly called the American Bankers’ League, which had renamed itself the American Taxpayers’ League. The Democrats, adrift and cowed by their 1924 election losses, folded their hand; Senator Furnifold Simmons, one of Coolidge’s chief antagonists, from 1924, backed the new bill, he said, “to make businessmen realize that the Democratic Party is not bent on taxing them or their enterprises exorbitantly.” And with the financial outlook now rosy and the federal budget running a surplus, tax cuts were an easy sell. Coolidge even began to worry that Congress had cut taxes too much and that deficits would return. He warned lawmakers that after the easy work of cutting taxes, they would also have to rein in spending - threatening to veto various appropriations bills if they defied him.

Coolidge rightly understood that tax cuts must be accompanied by spending cuts; otherwise, an increasing deficit and debt would result - the very opposite of the anticipated outcome of such policies. Several of his successors have attempted but failed to replicate his results: they have cut taxes but not spending. These later presidents did what they did, either because they were thwarted in their intended spending cuts by the opposition party, or because they did not fully understand the necessity of such cuts.

Reducing tax was, for Coolidge, not merely an exercise in applying some abstract economic hypothesis. Rather he understood tax cuts to be incremental increases in freedom and in human dignity. If a worker pays 10% or 20% of his income in taxes, this means that for 10% or 20% of his time, he was working for naught, which is tantamount to having his time stolen from him.

Lower taxes freed the ordinary worker to access the fruit of his labor. Lower taxes gave the worker a choice about what would be done with the fruit of his labor. Rather than have the government decide how to spend his money, the worker would be free to spend his own money as he pleased, or to save it, or to give it away. Tax policy was, for Coolidge, social policy. He strengthened the American economy, but he also saw these actions as improving the lives of citizens. Historian Robert Ferrell writes:

If Calvin Coolidge prided himself on one single aspect of his presidential years, it was his policy of fiscal economy. “I favor the policy of economy,” he declared, “not because I wish to save money, but because I wish to save people.” The “people” part of the equation was perhaps a rhetorical flourish, yet people were involved; he may have been speaking of their labor, which he would save by not spending it. In any case, he saw absolute, positive good in fiscal economy, and therefore he not merely balanced the budget but obtained a surplus during every one of his presidential years (as Harding had done before him).

In terms of specific numbers, the Coolidge tax cuts, and their effect on the economy, are described by historian Thomas Sowell:

What actually followed the cuts in tax rates in the 1920s were rising output, rising employment to produce that output, rising incomes as a result and rising tax revenues for the government because of the rising incomes, even though the tax rates had been lowered. Another consequence was that people in higher income brackets not only paid a larger total amount of taxes, but a higher percentage of all taxes.

Who should get the credit for the improvement in the economy? Many historians point to Andrew Mellon, but Mellon was retained by Coolidge, and Mellon’s proposals would not have become law without Coolidge’s support.

Did America’s prosperity during these years, produced by Coolidge and Mellon, come at the cost of the economic collapse of the 1930s? Probably not. The Great Depression was created when what could have been a temporary self-correction in the economy was turned into a chronic condition by certain taxes and tariffs which distorted natural market forces, by the mere existence of the Federal Reserve System, and by well-intentioned but counterproductive attempts to intervene in the economy.

It was careful analysis which led Coolidge and Mellon to their policies, and careful implementation of those policies led to an era of prosperity for citizens of all classes.

The Economic Pain of the Great Depression

By the late 1930's, the misery of the Great Depression had been growing for several years. Unemployment in the United States was worse in 1938 than it was in 1937, and the stock market remained a disaster. What began as a temporary correction in late 1929 was extended for a decade.

Roosevelt's celebrated New Deal programs included four steps: the creation of a large amount of debt as the government borrowed huge sums of money; a significant increase in taxation; a high degree of regulation on almost every aspect of the economy; and a series of "make work" programs which created government jobs.

In August 1937, after the nation and its economy had suffered extensive damage inflicted upon it by the New Deal programs, many of the country's employers were unable to offer meaningful work. Historian Amity Shlaes writes:

Companies were also marking new lows. Leonard Ayres, the executive at Cleveland Trust who had called on Alf Landon with Anderson in 1936, tried to get a grasp on the story by comparing the profitability of corporations in the current decade to that in the preceding one. He found that close to two of three had been profitable from the midteens through the 1920s. Since the Depression, however, that ratio had dropped below one in three, so that "for nearly a decade now the great majority of corporations have been losing money instead of making it," he would note. The editors at the Economist in London were also watching, trying to put what was happening to the United States in perspective. In 1930, the per capita national income of the United States had been one-third larger than that of Britain, the magazine wrote. At the end of the 1930s, it was about the same. The problem, the magazine would conclude several years later, was "institutional obstructions to a free flow of capital." The 1930s, all in all, the magazine would decide, were a strange decade; maybe, as it wrote, the United States really had forgotten how to grow.

It was a decade of misery. Several other countries had been able to find a slow steady path to recovery, but in the United States, the indicators got steadily worse. The Great Depression was worldwide, but took a different shape in each country. In America, the New Deal programs, well-intentioned as they might have been, prevented recovery.

Coolidge's Lasting Contributions

Calvin Coolidge accomplished feats which proved to strengthen the United States long after he left office. In matters of domestic policy, his victories were in the matter of race relations and in the matter of carefully managing the money which belonged to the citizens; in matters of foreign policy, he eased tensions among the nations by means of the Dawes Plan and the Kellogg-Briand Pact.

Long before occupying the White House, Coolidge was an acknowledged expert at fiscal policy. He was resourceful at finding ways to reduce government spending. Historian Amity Shlaes writes:

It was as president that Coolidge's saving proved so exceptional. Coolidge hacked away at the federal budget with a discipline tragically missing in his well-intentioned predecessor, Warren G. Harding. Coolidge vetoed fifty bills and turned down new spending, even for projects such as farm subsidies and construction of rural roads that would have immensely benefitted the region from which he hailed.

By foregoing the short-term gains which might arise from federal funds for agriculture or road-building, Coolidge made possible larger and longer-term gains which were reaped when these sectors were allowed to grow organically. Likewise, the growth of electrification under Coolidge was greater precisely because he did not enact something like the Rural Electrification Act. While many citizens obtained electrification under Coolidge between late 1923 and early 1929, relatively few people gained electrification after March 1933, despite Congress's approval of Roosevelt's Rural Electrification bill.

Coolidge was constantly working to reduce the nation's debt. The result was that taxpayer dollars were not being used to pay interest. Coolidge understood that having a debt reduced the nation's productivity, and that paying interest was a waste of money. During Coolidge's administration, unemployment was low and went lower.

Between August 1923 and March 1929, the economy encouraged invention and growth. Inventors found opportunities to bring new technologies to market. Average citizens were able to obtain these new goods and the standard of living increased for Americans of all classes.

Coolidge served for sixty-seven months, finishing out Harding's term after Harding died in early August 1923 and remaining until March 1929. Under Coolidge, the federal debt fell. Under Coolidge, the federal budget was always in surplus. Under Coolidge, unemployment was 5 percent or even 3 percent. Under Coolidge, Americans wired their homes for electricity and bought their first cars or household appliances on credit. Under Coolidge, the economy grew strongly, even as the federal government shrank. Under Coolidge, the rates of patent applications and patents granted increased dynamically. Under Coolidge, there came no federal antilynching law, but lynchings themselves became less frequent and Ku Klux Klan membership dropped by millions. Under Coolidge, a man from a town without a railroad station, Americans moved from the road into the air.

Perhaps Coolidge's one regret was Congress's refusal to pass the antilynching bills which he encouraged. He worked around this partisan opposition by finding other ways to advance African-American civil rights. He was the first incumbent president to give a commencement address at a historically Black college when he spoke at Howard University in 1924.

In sharp contrast to Woodrow Wilson, who was an enthusiastic supporter of the KKK, Coolidge made fun of the Klan, and was clear in his speeches that would support the right of African-Americans to vote, even as he supported their other civil rights.